What about repaying a Reverse Mortgage Loan?

The very nature of a reverse mortgage loan can be confusing. With a reverse mortgage loan, lenders pay you either in monthly installments, with one lump sum, a line of credit or as a combination of a line of credit and monthly installments. The following lists provide information regarding repayment of a reverse mortgage loan.

A reverse mortgage loan comes due when under the following conditions:

Death of the homeowner or last surviving eligible non-borrowing spouse

Upon sale of the home by the homeowner

If the homeowner lives elsewhere for 12 consecutive months (i.e. assisted living home)

Upon an instance of default.

When the reverse mortgage loan becomes due there are two options for paying it off.

Proceeds from the sale of the home

The homeowner or heirs of the homeowner can refinance the loan

Like all loans a reverse mortgage loan does carry conditions in order to remain valid. Reasons a borrower may find themselves in default include: